Armed with funds from a recent private placement, Arauco is planning to accelerate exploration programs on the more developed properties which it has acquired in southern Chile.
Funding for this work will be provided in part by Teck (TSE) which recently agreed to buy 500,000 Arauco shares at a price of $1 per share. Teck has options to buy further shares in stages at prices between $1.50 to $2.50, which, if exercised, give it the right to appoint up to two directors to Arauco’s board.
More importantly, the major will have the right to acquire 50% of Arauco’s interest in any property in return for financing the property to production. Arauco will act as the operator up to the preliminary feasibility stage. At that point, Teck can elect to complete a feasibility study and finance the project to production and become operator.
Arauco is a private company formed in 1990 to acquire, explore, develop or joint venture properties in Latin America, primarily in under-explored southern Chile. Most of the current exploration and mining activity is taking place in the high deserts of northern Chile.
Arauco operates from an office in Santiago, that is staffed by mining professionals with years of operating experience in Chile.
The company has already identified numerous properties in southern Chile, and staked 19 properties which include gold, copper-gold and polymetallic targets. Arauco is currently owned 15% by International Northair Mines (VSE). Other shareholders include Princeton Mining (TSE), Rea Gold (TSE), St. Mary Minerals and the Hunter Joint Venture. The founding members intend at some point to convert Arauco to a publicly traded company.
Fred Hewett, vice-president of the Northair group, says southern Chile has “fantastic geological potential and is very reminiscent of British Columbia in the 1950s.” He also says the region’s geology lends itself to exploration techniques commonly used in the Canadian Cordillera.
Southern Chile is being opened up by a new highway and a newly active logging industry.
Be the first to comment on "Teck invests in Chilean venture"